Sunday, August 10, 2008

Preuksa looks to speed up resales

More buyers seen declining transfers


The listed developer Preuksa Real Estate (PS) Plc aims to speed up resales of housing units and maintain overall inventories in the face of a rising number of buyers who have refused to accept property transfers since May.

The company has shortened the grace period to 30 days from 60 days for buyers whose down payments were overdue to reconfirm their commitments. If the buyers did not want to transfer home ownership, the company would then terminate the contract and attempt to resell the properties.

Chief financial officer Somboon Wasinchutchawal said the company was confident it could make speedy resales and would not be stuck with a rising inventory of unsold homes. The value of its housing inventory is now between 1.8 billion and two billion baht, the same as in the first quarter of this year.

''It's good for us as we can monitor [buyer sentiment] and x-ray their problems,'' he said.

The rate of customers refusing to accept unit transfers rose to 12% at the end of June from 8% in the first quarter, reflecting the growing difficulties some consumers are having as inflation rises.

Mr Somboon said not all the refusals reflected inability to pay, as some buyers simply wanted to change units or move to other locations.

PS has spent three billion baht acquiring new land plots since the start of this year. The country's second-largest residential developer expects to spend another one billion baht on land over the rest of the year.

PS has been looking increasingly at prime locations for condominium development and lately has seen more chances for large developers to acquire more plots.

As a result, PS increased the number of projects launched this year to 46 from 40, of which 25 worth a combined 12 billion baht would be launched in the second half of the year.

Chief executive Thongma Vijitpongpun said the company had postponed the launch of condominiums from the first half to the second half as it expected construction costs would start to stabilise or decline.

''We will speed up construction jobs during the current six-month period that the government is offering oil subsidies,'' he said.

PS will also increase prefab construction from 60% to 82% to accelerate the transfer of low-rise units.

In the fourth quarter, it ill also revise down housing prices by 2-3% as steel prices are starting to ease.

While the company has suspended its investment in Vietnam, it will start developing 300 single houses and townhouse worth around US$5 million in Bangalore, India by the end of the year. KPMG Poomchai is advising on its Indian subsidiary's structure and registration.

PS also plans to issue bonds or bills of exchange worth up to 1.5 billion baht in the fourth quarter to help fund business growth.

PS yesterday reported a first-half net profit of 947 million baht, an increase of 54% from 615 million in the same period last year, on sales of 5.51 billion baht, up 34%. Second-quarter net profit rose 98% year-on-year to 639 million baht, on sales of 3.28 billion baht, up 47%.

PS shares closed yesterday on the SET at 8.25 baht, down 40 satang, in trade worth 29.45 million baht.

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